Argentina To Seize Control Of Oil Firm
Argentina has vowed to seize a controlling stake in the country's biggest oil company, YPF, owned by Spain's Repsol, provoking a furious response from Madrid.
The move was announced to applause on Monday at a meeting between President Cristina Fernandez, her cabinet and Argentine governors, and came despite warnings from Madrid and EU officials.
Reading a statement at the meeting, an official said YPF-Repsol "is declared a public utility and subject to expropriation of 51% of its assets".
Spain has denounced the move and called a crisis cabinet meeting.
"It's a hostile decision against Repsol, thus against a Spanish business, and thus against Spain," said Spanish industry minister Jose Manuel Soria, speaking after the meeting called by prime minister Mariano Rajoy.
"The government is announcing that it will take all the measures it considers appropriate to defend the legitimate interests of Repsol and of all Spanish businesses abroad," he added.
YPF has been under intense pressure from Ms Fernandez's government to boost production and its share price has plunged due to months of speculation about a state takeover.
Ms Fernandez said the government would ask Argentina's parliament to approve a bill to seize shares held exclusively by Repsol, saying energy was a vital resource.
"If this policy continues - draining fields dry, no exploration and practically no investment - the country will end up having no viable future, not because of a lack of resources but because of business policies," she said.
Repsol described Argentina's move as "clearly unlawful and seriously discriminatory" and said it would take legal action.
But Ms Fernandez dismissed the risk of reprisals. "This president isn't going to respond to any threats because I represent the Argentine people. I'm the head of state, not a thug," she said.
Spain and the European Union last week warned that Argentina would damage relations with them if it went ahead and nationalised YPF.